Nuclear energy, including SMR build in Bowmanville, to benefit from tax breaks in federal budget
Published March 29, 2023 at 12:42 pm
The Canadian Nuclear Association believes the range of tax credits introduced in this week’s federal budget that can be applied to nuclear power – including OPG’s 300-megawatt Small Modular Reactor (SMR) being built at Bowmanville’s Darlington Nuclear plant – is proof of Ottawa’s “clear and strong support” for nuclear energy playing an “indispensable role” in the country’s clean energy future.
In addition to being included in the clean energy investment tax credit, nuclear has been made eligible for a range of other tax incentives, further leveling the playing field for clean energy technologies, and enabling nuclear to compete fairly with other non-emitting sources of power, said association CEO John Gorman.
“Today’s budget represents a significant change in how the Federal government is approaching nuclear power in Canada,” Gorman declared. “No longer are we simply ‘on the table’ as Prime Minister Trudeau put it one year ago; nuclear is now recognized as a fundamental and necessary component of Canada’s low carbon energy system.”
A new 15 per cent refundable investment tax credit for clean electricity was introduced that can be applied to all sizes of nuclear power, including SMRs, large builds, and new refurbishment projects. The credit will be available to both public and privately owned entities and will also be available for equipment enabling the transmission of electricity between provinces and territories.
This investment tax credit is separate from a clean technology Investment tax credit introduced in the 2022 Federal Budget that will provide up to 30 per cent for non-emitting electricity generation technologies, including SMRs.
The 2023 budget also contained a 30 per cent investment tax credit for manufacturing of clean technologies and the extraction, processing, or recycling of critical minerals. This new credit includes manufacturing of nuclear energy equipment and processing or recycling of nuclear fuels.
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Nuclear power is also being supported through:
- Extension of the Reduced Tax Rate for Zero-Emission Technology Manufacturers to include the nuclear power sector, including fuel reprocessing and heavy water treatment
- An additional $20 billion being granted to Canada Infrastructure Bank for accelerating the energy transition, including up to $10 billion in clean power, and a further $10 billion in green infrastructure
- Increased budget of $1.3 billion to increase efficiencies with regulatory reviews and approvals, including for the Canadian Nuclear Safety Commission, Impact Assessment Agency, and others
U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau
As well, the Canada Growth Fund will partner with the Public Sector Pension Investment Board, enabling it to attract private capital to Canada’s clean economy, and $500 million will be provided over ten years to the Strategic Innovation Fund, which has supported SMR projects in the past.
The budget also provides support for a broad range of initiatives aimed at accelerating Canada’s clean energy transition, particularly through electrification of those sectors that are currently reliant on fossil fuels, including transportation, buildings, and industry, and the production of hydrogen.
Canadians for Nuclear Energy president Chris Keefer, whose organization can rightly take much of the credit for saving the Pickering Nuclear Generating Station from the chop (and later blitzed Parliament Hill with a pre-budget message for the federal government to “centre” nuclear energy in future international energy deals), said the budget represents a turnabout in how nuclear energy is viewed in Ottawa.
“Nuclear in the federal Canadian budget in a big way is signalling a sea change for this government,” Keefer said. “We’ve gone from hostility to ‘luke-warmism’ to bold support with a budget inclusive of all nuclear, large and small.”
In their joint statement released last week, Prime Minister Justin Trudeau and U.S. President Joe Biden highlighted the need to accelerate cooperation on critical clean energy opportunities and supply chains, including advanced and conventional nuclear energy. This was followed by a joint statement by the Natural Resources Canada and the US Department of Energy, which provided more details on potential areas of coordination and cooperation.
“The Canadian nuclear industry is encouraged by the government’s commitment to nuclear playing an increasingly significant role in the country’s energy mix,” Gorman said. “While additional steps must be taken to ensure that all clean energy technologies receive equal and fair treatment, (the) budget is a significant step to ensuring that Canada remain a global leader in the advancement of this critically important clean energy technology.”
Canadians for Nuclear Energy President Dr. Chris Keefer and Prime Minister Justin Trudeau